The Cayman Islands Monetary Authority licensed 29 captive insurance companies in the first nine months of 2011.
This is 14 more than during the same period in 2010. Captives are set up by companies or groups to finance specific risks of that parent company or group.
The total number of captives licensed by CIMA is 730, following a six year low of 720 at the end of the first quarter of this year.
In September, the captives industry reported total premiums of US$9.6 billion. This is 12 per cent higher than the US$8.6 billion reported at the end of 2010 and the highest level recorded in CIMA’s history.
Total reported assets in the third quarter were US$58.3 billion compared with US$57.9 billion at the end of 2010.
The third quarter statistics show the continued resilience of Cayman’s captive insurance sector, CIMA said in a statement.
CIMA’s Managing Director Cindy Scotland said, “This 93 per cent increase in captive formations and close to $10 billion in premiums are indicators of the health of our captive insurance industry, despite the generally soft international insurance market conditions. In all of 2010 there were 25 new captives formed, so for our 2011 numbers to already be at 29, and with new applications pending, we anticipate this calendar year to reflect significant growth in new captives.”
The total number of captives of 730 is still down from the end of the year 2010 when 738 active captives were licensed by CIMA. The decline in the first quarter was still a follow on effect from licence terminations of companies in liquidation since 2009 and 2010 but not dissolved until 2011, as well as special purpose vehicles that completed their one year policy, CIMA said.
The Cayman Islands continues to be the leading jurisdiction for health care captives, as 256 of the captive companies licensed by CIMA during the third quarter – about 35 per cent of the total number – were health care captives. This is followed by workers’ compensation as the second largest line of business for 157 captives (22 per cent).
The Cayman Islands captive insurance industry is composed mainly of companies insuring risks in North America. Premiums originating from North America accounted for 84 per cent of the Cayman market, followed by Europe at 3 per cent, the Caribbean and Latin America at 2 per cent and the remaining global market (11 per cent). In terms of captive numbers, North America accounts for 90 per cent of the Cayman market, followed by the Caribbean and Latin America (3 per cent), Europe (2 per cent) and the remaining global market (5 per cent).
The 730 class B (i.e. captive) licensees in the third quarter consisted of 418 pure captives (57 per cent), 120 segregated portfolio companies (16 per cent), 75 group captives (10 per cent), 51 association captives (7 per cent), 34 special purpose vehicles (5 per cent), 31 open market insurers (4 per cent) and one rent-a-captive. The 120 segregated portfolio companies comprise a total of 634 active segregated portfolios.
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